Problem:
1. Strategic decisions and management accounting. A series of independent situations in which a firm is about to make a strategic decision follow.
Decisions:
a. Roger Phones is about to decide whether to launch production and sale of a cell phone with standard features.
b. Computer Magic is trying to decide whether to produce and sell a new home computer software package that includes the ability to interface with a sewing machine and a vacuum cleaner. There is no such software currently on the market.
c. Christina Cosmetics has been asked to provide a ?ostore brand?? lip gloss that will be sold at discount retail stores.
d. Marcus Meats is entertaining the idea of developing a special line of gourmet bologna made with sun dried tomatoes, pine nuts, and artichoke hearts.
1. For each decision, state whether the company is following a low price or a differentiated product strategy.
2. For each decision, discuss what information the management accountant can provide about the source of competitive advantage for these firms.